EXHIBIT 10E
EMPLOYMENT AGREEMENT
between
E-SYSTEMS, INC.
and
BRIAN D. CULLEN
October 14, 1991
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of the 14th day of October, 1991 (the "Effective Date"), by
E-Systems, Inc. (hereinafter referred to as "ESY") and Brian D. Cullen
(hereinafter referred to as "Employee").
RECITALS
WHEREAS, Employee is an executive officer of ESY and has made and is
expected to continue to make major contributions to the profitability, growth
and financial strength of ESY;
WHEREAS, ESY desires that Employee agree to serve as an executive officer
of ESY;
WHEREAS, Employee is willing to serve as an executive officer of ESY if the
rewards for successful management of the enterprise and for relinquishment of
other opportunities which may be available to him are commensurate with the
responsibilities that would be undertaken by him; and
WHEREAS, the Board of Directors of ESY recognizes Employee's abilities to
contribute to the growth and success of ESY during his employment and desires to
reward such performance and to take into account compensation and benefits,
trends and practices in the high technology industry in which ESY competes for
business and executive talent.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, receipt of which is hereby acknowledged, ESY and
Employee hereby agree as follows:
1. EMPLOYMENT AND TERM. Commencing on the Effective Date, Employee's
employment shall continue hereunder through November 8, 1996, unless Employee
retires pursuant to Section 2(c)(3) hereof prior to such date. The term of this
Agreement shall be automatically extended for an additional period of five years
commencing November 8, 1996, and ending November 8, 2000, unless either the
Board of Directors or the Employee shall, not less than 120 days prior to
November 8, 2000, give notice in writing to the other that this Agreement shall
not be extended or unless this Agreement shall have been otherwise terminated.
Two additional automatic renewal periods shall extend from November 8, 2000 to
November 8, 2002, and from November 8, 2002 to November 8, 2005, respectively;
provided that each prior renewal shall have occurred and that neither party has
given notice not less than 120 days prior to November 8, 2000 or November 8,
2002, respectively, to the other in writing that this Agreement shall not be so
extended or unless this Agreement shall have been otherwise terminated. Employee
will devote his full time and efforts to ESY's business and not engage in any
activities that would be inconsistent with the strategies and objectives of ESY.
During this term (hereinafter referred to as the "Employment Period"), Employee
shall serve as an executive of ESY and agrees to serve in such office or offices
in ESY to which the Board of Directors of ESY may from time to time elect or
appoint him, as currently set forth in Schedule 1 hereto.
2. COMPENSATION AND BENEFITS. In consideration of his services during
the Employment Period, Employee shall be paid compensation and receive benefits
from ESY as follows:
(a) During the Employment Period, Employee shall be paid a base
salary in equal installments not less frequently than monthly at an annual rate
not less than the greater of (1) $187,000 or (2) the base salary of the Employee
most recently approved by the Board of Directors of ESY. Employee's base salary
shall be subject to such increases as may be approved by the Board of Directors
of ESY.
(b) Employee shall also receive such incentive compensation as may be
approved by the Board of Directors of ESY and any profit sharing, retirement
rights, or other perquisites to which Employee may be entitled under the terms
of this Agreement or otherwise. A description of current perquisites is
contained in Exhibit B attached hereto.
(c) ESY will provide Employee with supplemental retirement, death,
and disability benefits as follows:(1) Following Employee's retirement, he
shall be paid a "Normal Retirement Benefit" equal to 50 percent (55 percent if
the Agreement is extended to November 8, 2002, as provided above and Employee
retires on or after November 8, 2002; 65 percent if the Agreement is extended to
November 8, 2005, as provided above and Employee retires on or after November 8,
2005) of "Average Monthly Compensation". "Normal Retirement Benefit" and
"Average Monthly Compensation" are defined in the E-Systems, Inc. Executive
Supplemental Retirement Plan as amended (the "Executive Plan"), a copy of which
is attached to this Agreement as Exhibit A. The Executive Plan is incorporated
in all respects herein; provided, however, that the terms of this Agreement
shall take precedence over any provisions to the contrary contained in the
Executive Plan. Notwithstanding Section 5.1 of the Executive Plan, Employee
shall be eligible for benefits under the Executive Plan unless (i) Employee
voluntarily terminates his employment in breach of his obligations under this
Agreement, or (ii) ESY terminates Employee's employment pursuant to Section 9
hereof. Employee shall otherwise remain eligible for benefits under the
Executive Plan upon involuntary termination of employment by ESY, or upon
termination of employment due to death or disability. Employee's eligibility
for benefits under the Executive Plan and this Section 2(c)(1) upon voluntary
retirement shall not be accelerated by any provision of Section 5.3 of the
Executive Plan. The amounts payable pursuant to this Section shall be paid
Employee as provided in the Executive Plan. By way of example, and not as a
limitation on the foregoing provisions of this Section 2(c)(1), if the
employment of Employee by ESY continues until November 8, 1996, Employee's
rights to benefits under the Executive Plan shall become nonforfeitable. If
Employee is not employed by ESY following the termination of this Agreement, the
benefit provided by the Executive Plan shall be a deferred, vested benefit
available at Employee's "Normal Retirement Date" as defined in the Executive
Plan.
(2) If Employee should die before retiring, or while permanently
disabled or retired, his surviving widow shall be paid a Spouse's Pension as set
forth in the Executive Plan. If the Employee dies without a surviving spouse,
but with one or more children who have not attained the age of 22 years, a
Children's Pension shall be paid in accordance with the Executive Plan. Upon
the death of a surviving spouse who is receiving a Spouse's Pension, surviving
children of Employee shall receive a Children's Pension if the requirements of
the Executive Plan are met.
(3) If Employee should become permanently disabled, he shall be
entitled to retire as of the date of such a permanent disability without prior
notice to ESY. The retirement benefit provided hereunder to Employee shall be
two-thirds of the applicable amount specified in Section 2(c)(1) above, payable
in accordance with the Executive Plan.
(4) It is expressly understood that ESY's obligations pursuant
to this Section 2(c) may or may not be funded, but neither Employee nor his
surviving spouse or children shall have any interest present or otherwise in
such payments until they are actually made.
(5) "Permanent disability" as used herein shall be defined as
Employee's physical or mental condition which totally prevents Employee from
performing the duties required of his position, and is reasonably expected to be
of a permanent duration. Employee's inability to perform such services due to
illness or accident reasonably expected to incapacitate him for no longer than
three months shall not be deemed a permanent disability. If Employee and ESY
are in disagreement as to the existence of such permanent disability, the
parties hereby agree to be unconditionally bound by the majority decision of
three arbitrators who shall be licensed physicians. The arbitrators shall be
selected one by Employee, one by ESY and the third by the first two arbitrators.
(6) The obligations of ESY under Sections 2(c) 2(e), 2(f), 9,
and 18 shall survive expiration of the Employment Period and any extension
thereof.
(d) Employee shall be excused from performing any services for ESY
hereunder during periods of temporary incapacity and during reasonable vacations
without thereby in any way affecting the compensation to which he is entitled
hereunder. In no event shall Employee be assigned duties that would (i) involve
unreasonable personal hazard; (ii) necessitate prolonged absences or changes in
the place of his residence without his consent; or (iii) require the Employee to
have as his principal location of work any location that is in excess of 25
miles from the Employee's principal residence specified in Schedule 1 attached
without his consent.
(e) Medical, hospital, surgical, dental, prescription drugs and eye
care coverage equivalent to that presently furnished to Employee and his wife by
ESY will be provided to them for their lifetime during the Employment Period and
retirement through insurance or otherwise; provided, however, that dental
coverage after retirement shall be limited to a combined aggregate of $500 per
year for Employee and spouse. A description of the present benefits at the date
of this Agreement is contained in Exhibit B hereto.
(f) It is the intention of the parties that this Agreement be an
enhancement of, and not a reduction or limitation in, any benefit to which
Employee may be entitled whether under this Agreement or under any benefit plan,
program or policy in which Employee may be a participant during the Employment
Period, while disabled or while retired. If the benefit to Employee shall be
greater under any benefit plan, program or policy maintained by ESY, ESY shall
promptly notify Employee in writing and Employee shall be entitled to receive
such larger or greater benefit pursuant to such benefit plan, program or policy
in lieu of or in addition to (but not in duplication of) the benefit set forth
in this Agreement without in any respect waiving Employee's rights to receive
any other payment of benefits to which he may be entitled otherwise under this
Agreement.
(g) The participation of the Employee in the qualified benefit plans,
programs, and policies maintained by ESY shall not be reduced or altered except,
and only to the extent, as required by law or governmental regulation.
3. EXPENSES AND PERQUISITES. During the Employment Period, Employee
shall be allowed all reasonable expenses and perquisites and shall be furnished
office space and facilities suitable to his position and adequate for the
performance of his duties, in accordance with such general policies as may be
established by ESY from time to time for executive employees receiving
comparable compensation.
4. CONFLICTS OF INTEREST AND COMPETITION. Without the prior consent of
ESY, Employee shall not, during the Employment Period, engage in any business
(directly or through any kind of ownership or other arrangement other than
ownership of securities of publicly-held corporations) that is competitive with
that of ESY or its subsidiaries or accept employment with or render services to
a competitor or take action inconsistent with the fiduciary relationship of an
executive to his corporation. Subject to such limitations, Employee may make
investments for his own account in any business or enterprise whatsoever and
serve as an officer or director thereof and receive compensation therefor,
provided such activity does not conflict with his obligation to render his
exclusive full-time services to ESY and its subsidiaries during his employment
hereunder.
5. PARTICIPATION IN BENEFIT PLANS. Except as expressly provided herein,
this Agreement shall not in any way modify, limit, impair, or affect the
existing or future rights or interests of Employee to receive any employee
benefit to which he would otherwise be entitled or as a participant in the
present or future employee benefit plans of ESY.
6. INSURANCE. ESY in its sole discretion, may purchase in its name and
for its own benefit, life and disability insurance on Employee in any amount or
amounts considered advisable. Employee shall have no right, title or interest
therein, and will submit to required medical examinations and execute and
deliver any application, or other instrument in writing, reasonably necessary to
effectuate such insurance.
7. MITIGATION. In the event that this Agreement or the employment of
Employee by ESY hereunder is terminated by ESY other than pursuant to Section 9
hereof, ESY shall acknowledge by notice to Employee that Employee offered to
continue employment with ESY and that such offer was rejected, and Employee
shall use reasonable efforts to mitigate his damages by seeking other comparable
employment; provided, however, that (a) in no event shall Employee be required
to accept a position of less importance or dignity or of substantially different
character, compensation or benefits than the position held as of the date of
this Agreement, nor shall he be required to accept a position other than in a
location within 25 miles of his principal residence immediately prior to the
date of termination of employment, and (b) mitigation shall not be required if
the Employee is eligible at the time of termination to receive payments under
the Executive Plan. Subject to the foregoing provisions of this Section 7, in
the event that Employee secures other permanent employment with another
corporation or other legal person, he shall promptly pay over to ESY, as
received by him in his new employment, an amount equal to the total cash
compensation actually paid to him in his new employment for services rendered
during the Employment Period; provided that in no event shall Employee be
required to repay any amounts earned in new employment that exceed the amounts
otherwise payable to him under this Agreement for a comparable period. Except
as otherwise expressly provided in this Section 7, Employee shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise.
8. SET-OFF; IMPACT ON OTHER AGREEMENTS. There shall be no right of
set-off or counterclaim in respect of any claim, debt or obligation against any
payment to Employee provided for in this Agreement. A termination of this
Agreement by ESY or Employee pursuant to this Agreement shall not affect any
rights that Employee may have pursuant to any other agreement, policy, plan,
program or arrangement of ESY, which rights shall be governed by the terms
thereof, and the obligations of ESY with respect to amounts payable pursuant
thereto shall not be affected by termination of this Agreement.
9. TERMINATION. Subject to the provisions of Section 2(c)(1) hereof, ESY
may terminate this Agreement and all of its obligations hereunder, except for
obligations accrued but unpaid to the effective date of termination, solely for
"Cause". "Cause" shall mean (i) the Employee's willful refusal, without
reasonable excuse, to render services hereunder on substantially a full-time
basis; (ii) an intentional act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with ESY or any prior
employment; (iii) intentional wrongful damage to property of ESY;
(iv) intentional wrongful disclosure of secret processes or confidential
information of ESY; or (v) intentional wrongful engagement in any competitive
activity (as defined in Section 4); provided that any such act or acts must have
been materially harmful to ESY; and further provided, however, that no such act
shall constitute "Cause" if the Employee did not directly or indirectly induce
the act or acts resulting in material harm to ESY. For purposes of this
Agreement, no act or failure to act on the part of the Employee shall be deemed
"intentional" or "willful" if it was due primarily to an error in judgment or
negligence, but shall be deemed "intentional" or "willful" only if done or
omitted to be done by the Employee not in good faith and without reasonable
belief that his action or omission was in the best interest of ESY.
Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated for "Cause" hereunder unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the Board then in office at a meeting of
the Board called and held for such purpose, after reasonable notice to the
Employee and an opportunity for the Employee, together with his counsel (if the
Employee chooses to have counsel present at such meeting), to be heard before
the Board, finding that, in the good faith opinion of the Board, the Employee
had committed an act constituting "Cause" as herein defined and specifying the
particulars thereof in detail. Nothing herein will limit the right of the
Employee or his beneficiaries to contest the validity or propriety of any such
determination.
10. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas, without giving
effect to the principles of conflict of laws of such State.
11. ENTIRE AGREEMENT. This Agreement constitutes the whole agreement of
the parties hereto in reference to any employment of Employee by ESY and in
reference to any of the matters or things herein provided for or hereinbefore
discussed or mentioned in reference to such employment, all prior
agreements, promises, representations, and understandings relative thereto being
herein merged.
12. ASSIGNABILITY.
(a) In the event that ESY shall merge or consolidate with any other
corporation or all or substantially all of ESY's business or assets shall be
transferred in any manner to any other person, such successors shall thereupon
succeed to, and be subject to, all rights, interests, duties and obligations of,
and shall thereafter be deemed for all purposes hereof to be ESY hereunder. This
Agreement shall be binding upon and inure to the benefit of any such successor
and the legal representatives of Employee.
(b) This Agreement is personal in nature and neither of the parties
hereto shall without the consent of the other assign or transfer this Agreement
or any rights or obligations hereunder except for operation of law or pursuant
to the terms of this Section 12. Without limiting the generality of the
foregoing, Employee's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security interest
or otherwise, other than by a transfer by his will or by the laws of descent and
distribution and, in the event of any assignment or transfer contrary to this
Section 12, ESY shall have no liability to pay any amount so attempted to be
assigned or transferred.
13. REMEDIES CUMULATIVE. Remedies under this Agreement of either party
hereto are in addition to any remedy or remedies to which such party is entitled
or may become entitled at law or in equity.
14. SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be void or unenforceable, such provision
shall be regarded as severable and shall not affect the validity or
enforceability of the remaining provisions hereof.
15. WITHHOLDING OF TAXES. ESY may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or government regulation or ruling.
16. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms and covenants hereof may
be waived, only by written instrument executed by both of the parties hereto or
in the case of a waiver executed by the party waiving compliance. The failure
of either party at any time or times to require performance of any provisions
hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in
this Agreement whether by conduct or otherwise by any one or more instances
shall be deemed to be or construed as a further or continuing waiver of any such
breach or a waiver of the breach of any other term or covenant contained in this
Agreement.
17. NOTICE. For the purpose of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed to ESY at its principal
executive office and to Employee at his principal residence, or to such other
address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
18. LEGAL FEES AND EXPENSES. It is the intent of ESY that Employee not be
required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to Employee hereunder. Accordingly, if it should appear to Employee
that ESY has failed to comply with any of its obligations under this Agreement
or in the event that ESY or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any litigation designed to deny,
or to recover from, Employee the benefits intended to be provided to Employee
hereunder, ESY irrevocably authorizes Employee from time to time to retain
counsel of his choice, at the expense of ESY as hereafter provided, to represent
Employee in connection with the initiation or defense of any litigation or other
legal action, whether by or against ESY or any director, officer, stockholder or
other person affiliated with ESY, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between ESY and such counsel, ESY
irrevocably consents to Employee's entering into an attorney-client relationship
with such counsel, and in that connection ESY and Employee agree that a
confidential relationship shall exist between Employee and such counsel. ESY
shall pay and be solely responsible for any and all attorneys' and related fees
and expenses incurred by Employee (a) as a result of ESY's failure to perform
under this Agreement or any provision thereof, or (b) as a result of ESY or any
person contesting the validity or enforceability of this Agreement or any
provision thereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
ATTEST: E-SYSTEMS, INC.:
James W. Crowley, Secretary E. Gene Keiffer
Chairman of the Board and
Chief Executive Officer
EMPLOYEE:
Brian D. Cullen
AMENDMENT TO EMPLOYMENT AGREEMENT Between
E-Systems, Inc. and
Brian D. Cullen
dated October 14,1991
The first sentence in Section 2(c)(1) of this Agreement is amended to
read as follows:
(1) On December 1, 1993, Employee shall be entitled to a "Normal
Retirement Benefit", commencing at "Normal Retirement Date" (or at retirement if
later), equal to 50 percent (55 percent if the Agreement is extended to November
8, 2002, as provided above and Employee retires on or after November 8, 2002; 65
percent if the Agreement is extended to November 8, 2005, as provided above and
Employee retires on or after November 8, 2005) of "Average Monthly
Compensation".
Section 2(c)(1) is also amended by adding the following after the
first sentence:
"Normal Retirement Date" is defined in the Executive Plan.
Section 2(c)(1) is further amended by restating the final two sentences to
read as follows:
By way of example, and not as a limitation on the foregoing provisions of
this Section 2(c)(1), if the employment of Employee by ESY continues until
December 1, 1993, Employee's rights to benefits under the Executive Plan shall
become nonforfeitable. If Employee is not employed by ESY following December 1,
1993, the benefit provided by the Executive Plan shall be a deferred, vested
benefit available at Employee's "Normal Retirement Date" as defined in the
Executive Plan.
In Witness Whereof, the parties have duly executed this Amendment as of
this date November 22, 1993.
ATTEST: E-SYSTEMS, INC.
James W. Crowley, Secretary A. Lowell Lawson
President
(CORPORATE SEAL)
Employee:
Brian D. Cullen